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Breaking barriers to innovation: The power of digital transformation

Author

Listed:
  • Niu, Yuhao
  • Wen, Wen
  • Wang, Sai
  • Li, Sifei

Abstract

This study analyzes the impact of digital transformation on corporate innovation. Based on a sample of Chinese listed companies during 2007-2019, we find that digital transformation has a positive impact on corporate innovation. Mechanism tests show that digital transformation helps alleviate corporate financial constraints and improve corporate governance, thus breaks barriers to corporate innovation. Heterogeneity analysis reveals that the positive impact of digital transformation on corporate innovation is more pronounced in high-tech industries and in industries with more intense competition. These findings enrich the growing literature on the economic consequences of digital transformation and have policy implications for promoting corporate innovation.

Suggested Citation

  • Niu, Yuhao & Wen, Wen & Wang, Sai & Li, Sifei, 2023. "Breaking barriers to innovation: The power of digital transformation," Finance Research Letters, Elsevier, vol. 51(C).
    • Handle: RePEc:eee:finlet:v:51:y:2023:i:c:s154461232200633x
    DOI: 10.1016/j.frl.2022.103457
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    References listed on IDEAS

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    More about this item

    Keywords

    Digital transformation; Corporate innovation; Financial constraints; Corporate governance; Industry heterogeneity;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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